Company cancels earnings conference call in light of transaction with Thoma Bravo

First Quarter Highlights

• Total revenue of $287.8 million, up 15% year-over-year
• Billings of $276.7 million, up 16% year-over-year
• GAAP EPS of $(0.79) per share, Non-GAAP EPS of $0.49 per share
• Operating cash flow of $95.1 million and free cash flow of $88.5 million

SUNNYVALE, Calif., April 26, 2021 (GLOBE NEWSWIRE) — Proofpoint, Inc. (“the Company”) (NASDAQ: PFPT), a leading cybersecurity and compliance company, today announced financial results for the first quarter ended March 31, 2021.

“Our first quarter results mark a strong start to the year after record revenues in fiscal year 2020,” stated Gary Steele, chief executive officer of Proofpoint. “These results are a testament to our focused execution and people-centric approach to threat protection, information protection and compliance, which is winning across our market. We are also pleased to announce our transaction with Thoma Bravo, which we believe will position Proofpoint to build on this momentum and unlock the next phase of growth for our company.”

First Quarter 2021 Financial Highlights

• Revenue: Total revenue for the first quarter of 2021 was $287.8 million, an increase of 15%, compared to $249.8 million for the first quarter of 2020.
• Billings: Total billings for the first quarter of 2021 were $276.7 million, an increase of 16%, compared to $238.0 million for the first quarter of 2020.
• Gross Profit: GAAP gross profit for the first quarter of 2021 was $214.3 million, compared to $180.8 million for the first quarter of 2020. Non-GAAP gross profit for the first quarter of 2021 was $232.0 million, compared to $197.7 million for the first quarter of 2020. GAAP gross margin for the first quarter of 2021 was 74%, compared to 72% for the first quarter of 2020. Non-GAAP gross margin for the first quarter of 2021 was 81%, compared to 79% for the first quarter of 2020.
• Operating Income (Loss): GAAP operating loss for the first quarter of 2021 was $(42.1) million, compared to a loss of $(41.8) million for the first quarter of 2020. Non-GAAP operating income for the first quarter of 2021 was $38.2 million, compared to $25.4 million for the first quarter of 2020.
• Net Income (Loss): GAAP net loss for the first quarter of 2021 was $(45.3) million, or $(0.79) per share, based on 57.3 million weighted average shares outstanding. This compares to a GAAP net loss of $(66.8) million, or $(1.17) per share, based on 57.0 million weighted average shares outstanding for the first quarter of 2020. Non-GAAP net income for the first quarter of 2021 was $31.5 million, or $0.49 per share, based on 65.5 million weighted average diluted shares outstanding. This compares to Non-GAAP net income of $24.4 million, or $0.38 per share, based on 65.0 million weighted diluted shares outstanding for the first quarter of 2020. Non-GAAP earnings per share for the first quarters of 2021 and 2020 included the 6.0 million shares associated with the company’s convertible notes, and cash interest expense (net of tax) of $0.5 million for each period were added back to net income as the “If-Converted” threshold during these periods was achieved.
• Cash and Cash Flow: As of March 31, 2021, Proofpoint had cash, cash equivalents, and short-term investments of $882.6 million. The Company generated $95.1 million in net cash from operations for the first quarter of 2021, compared to $92.2 million during the first quarter of 2020. Capital expenditures were $6.6 million for the first quarter of 2021, compared to $12.4 million for the first quarter of 2020. The Company’s free cash flow for the first quarter of 2021 was $88.5 million, compared to $79.8 million for the first quarter of 2020.
• Stock Repurchase Plan: The Company repurchased approximately 209,000 shares at an average price of $124.87 during the first quarter of 2021.

Transaction with Thoma Bravo
In a separate press release issued today, Proofpoint announced that it has entered into a definitive agreement to be acquired by Thoma Bravo, a leading private equity investment firm focused on the software and technology-enabled services sector, for approximately $12.3 billion in cash, or $176.00 per share. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions, including approval by Proofpoint shareholders and receipt of regulatory approvals. Upon closing of the transaction, Proofpoint will become a private company, and its common stock will no longer be listed on any public market.

Cancellation of Earnings Conference Call and Suspension of Guidance
In light of the announced transaction with Thoma Bravo, Proofpoint has cancelled its earnings conference call previously scheduled for April 29, 2021. In addition, the Company will not be providing financial guidance for the second quarter of 2021 and is suspending its financial guidance for the full year 2021 as a result of the pending transaction.